SGX strengthens rules for mainboard listing issue managers

The review process for companies seeking a mainboard listing has been tightened, with issue managers facing higher disclosure standards.

The new rules, which take effect immediately, follow a major revamp of disclosure rules announced on Thursday.

Issue managers will now have to comply with the due diligence guidelines issued by the Association of Banks in Singapore (ABS).

These guidelines will be incorporated into the mainboard listing rules, said SGX RegCo, the regulatory arm of the Singapore Exchange.

They will serve as a reference point for industry standards and provide guidance on the broad principles issue managers should consider when conducting due diligence, said SGX RegCo.

SGX RegCo also strengthened its oversight of issue managers as part of overall enhancements governing the mainboard listings review process.

These and other enhancements to the mainboard listing rules follow generally supportive feedback to a public consultation in late 2018, said the regulator.

SGX RegCo is also codifying existing issue manager independence requirements, and will introduce a practice note to provide guidance on its assessment of the factors affecting this independence.

The note will set out the circumstances and relevant threshold limits in considering whether an issue manager is considered independent.

SGX RegCo will also require all directors and executive officers of a listing applicant, whether proposed or appointed, to be held responsible for ensuring that information submitted to the SGX in listing applications and SGXnet announcements is "complete and accurate".

This rule enhancement will clarify the regulatory position that proposed directors and executive officers are among the relevant persons held responsible for such accuracy and completeness.

"The strengthening of the rules governing the listing review process is crucial to investor confidence," said SGX RegCo chief executive Tan Boon Gin.

SGX RegCo announced on Thursday that mandatory quarterly reporting for bigger listed companies will be scrapped. When the rule change takes effect on Feb 7, only riskier companies will need to report earnings every three months.

At the same time, the regulator will enhance continuous disclosure rules in other areas to ensure investors stay informed.

A version of this article appeared in the print edition of The Straits Times on January 11, 2020, with the headline 'SGX strengthens rules for mainboard listing issue managers'. Print Edition | Subscribe